Key financial reporting challenges due to COVID-19 and how to deal with them?
July 22, 2021
COVID-19’s impact on business includes significant Financial Reporting issues. Various physical and technical problems of remote working are some of the key financial reporting challenges due to COVID-19.
Key financial reporting challenges due to COVID-19
There are broadly five key accounting and financial reporting issues arising from the pandemic
- Impairment: property, plant and equipment and other assets; ECL allowance
- Fair Valuation: investments, inventory values, hedging relationships
- Revenues : penalties on performance delays, price discounting, returns on sales
- Provisions/assets write downs : restructuring plans, deferred tax assets, insurance claims
- Going Concern: debt repayment, cash flow decline
However, financial reporting in the COVID-19 era, that is, how COVID-19 infects financial reporting and results goes beyond these. Some challenges in Financial Reporting and financial reporting issues, perhaps the major ones, arise from the overall pandemic-induced stress on business management which leads to oversights on strategy, controls, and compliances.
How to deal with financial reporting during the pandemic, therefore, goes beyond key financial statements or financial reporting issues alone. It needs a more holistic vision of how COVID-19 infects Financial Reporting and Results.
Effective Financial Reporting in the COVID-19 era with MBG Corporate Services
At MBG Corporate Services, we begin by understanding your four priorities vis-à-vis your key financial statements, and financial reporting issues.
- Operational continuity
- Key financial statements and financial reporting
Our approach on how to deal with financial reporting and key financial reporting challenges due to COVID-19 begins with a three-fold structure:
- Process set up: examine some challenges in financial reporting with respect to reporting elements and processes, identify gaps and needs, and support with relevant solutions
- COVID-19 impact diagnosis: assessment of key financial statements and how COVID-19 infects financial reporting and results in your business
- Financial Reporting: proprietary MBG tools to prepare and report key financial statements, audit schedules and accounting position memorandum, working closely with auditors